There's been some talk about prices rising even though the air is leaking from the bubble... so lets talk price...

"If the housing market is weakening, why are home prices still rising?You see, there are averages and there are averages. And when it comes to home prices, you need to know how they are calculated before you can conclude what's happening to the price of the average home."

"First of all, understand that average home prices that you may read about refer only to prices of those homes that were actually sold in a given month. They do not represent prices of all homes in the country."

"Even more important -- they are not the price of the same home measured from one month to the next. This is critical, for the way home prices are reported and analyzed, you'd think they were."

"The most common average price is the median price. This is the midpoint of all prices recorded in a given month. As you might imagine, the location of this midpoint is determined by the range of prices recorded."

"Thus, if more higher-priced homes are selling than lower-priced units, the median or geographic midpoint will move up accordingly. By the way, the same thing is true for another type of average -- the mean."

"Here's another thing to ponder: like new cars and trucks, many new homes have list prices. These are the prices that get recorded when the house is sold -- even if the seller has to sweeten the deal by offering such amenities as upgraded appliances, furniture, carpeting and the like.And there's a lot of this discounting going on, according to a March 4 article in the Wall Street Journal."

"Finally, logic would tell you that when interest rates rise, the more expensive homes, whose buyers are not as likely to be as affected by stiffer borrowing requirements as buyers of less expensive homes, will sell faster than lower-priced models. So home prices are not defying the laws of gravity. They're only doing what comes naturally."

19177 ARNOLD DR, Sonoma, CA 95476Price Reduced: 12/05/05 -- $625,000 to $599,999Price Reduced: 02/15/06 -- $599,999 to $589,000Days on Market: 155 First Reduction: 26k Second Reduction: 10k not really the kind of hustle we like to see when the house has been sitting for 155 days.

17313 PARK AVE, Sonoma, CA 95476Price Reduced: 01/31/06 -- $599,999 to $589,999Days on Market: 158 They relisted it on 2/16/06 trying to make it look like it has only been on the market 16 days Total Reduction: 10k ...

715 BOYES BLVD, Sonoma, CA 95476Price Reduced: 11/14/05 -- $879,000 to $849,000Price Reduced: 02/08/06 -- $849,000 to $799,000Days on Market: 194 Total Reduction: 80k round about 9.1%this one was relisted at $799,000 on 03/06/06 trying to make it look like it has been on the market only 13 days.

18015 HARVARD CT, Sonoma, CA 95476Price Reduced: 02/04/06 -- $775,000 to $750,000 Days on Market: 107 Total Reduction: 25kOddly enough- another house just a couple doors down from this property sold two weeks ago- for $685,000 -could it be that this one also sold but just hasn’t been accounted for yet in the sales tally? Or perhaps pulled off the market because of the lower price of the other property?

18 Comments:

731 5TH ST E, Sonoma, CA 95476 according to zillow this place was valued at 112k in 1997....tax value 50K.....now they want 779k??? what the hell are they thinking? There is also no sales record so the place most likely still belongs to long time owners.

ooh! MV... you just gave me an idea. I wonder what these price reduced listings zillow at...? Perhaps if I find an extra few hours in the day I will take a stab at putting a zillow value next to each of them. thanks for the inspiration.